Rental market 'could be wrecked by new planning order'

Posted: 17 Mar 2010 11:51:50 GMT

Buy-to-let landlords would be wise to note that a proposed planning order could have a devastating effect on the rental market, one expert has suggested.

Alan Ward, chairman of the Residential Landlords Association (RLA), says if the Planning Use Classes Order takes effect in April, landlords will be required to apply for planning permission if they wish to rent their property out to three or more unrelated tenants.

"The rental market will be wrecked for landlords wanting to offer property to sharers like nurses, young professionals and students," he states.

However, buy-to-let investors may be encouraged by the fact that rental yields are currently at their highest level in two years.

Figures from LSL Property Services reveal average annual returns amounted to 10.6 per cent in February, with rent increasing by 3.2 per cent in the last year.

Mr Ward suggests that while these figures make "interesting" reading, the buy-to-let market has not yet realised the "devastating potential" that new planning laws could have on the sector.

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